The Nasdaq Composite (^IXIC), as anticipated, encountered chart resistance at the 2400 level yesterday. The recovery pattern since last week's weakness has not been that robust and there is evidence that institutions are taking a cautious attitude until the implications of the numerous cross currents with the economic data, not to mention last week's turbulence, become somewhat clearer. The economic data that will be released today may be part of that clarification process.

Since the substantial decline in Treasury yields that coincided with last week's sell-off and the flight to quality, the yield on the 10-year note has barely budged. There is a triangular formation evident from the last week of trading and a range expansion session would seem to be imminent. It may come today after the release of the February employment data.





The UK’s FTSE 100 index (^FTSE) has recovered quite decisively since last week’s weakness but as the chart indicates there could be stiff resistance to overcome just above yesterday’s closing level.



TRADE OPPORTUNITIES/SETUPS FOR FRIDAY MARCH 9, 2007

The patterns identified below should be considered as indicative of eventual price direction in forthcoming trading sessions. None of these setups should be seen as specifically opportune for the current trading session.

American International Group (AIG) has spent the last six weeks attempting to break above the $70 level. After last week's dip it now appears that the momentum and price formation favor a successful breach of this level.



The chart for Costco (COST) is reflecting negative divergences and yesterday's 3.3% decline on three times the average daily volume may have further to go.



Cisco Systems (CSCO) posted a tiny Doji candlestick and the pattern suggests that the area just above yesterday's close could provide some firm resistance.



One of our recent commentaries discussed the positive money flow for Activision (ATVI). The stock moved up 3.6% yesterday and closed above both of the shorter term EMA's.



Linear Technology (LLTC) moved ahead above all three EMA's on above average volume and could be headed higher.



Pacific Sunwear (PSUN) gapped up on twice the average daily volume and could be headed toward the intersection of the 50- and 200-day EMA's.



Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market. He specializes in market neutral investing and and is currently working on a book about the benefits of trading with long/short strategies, which is scheduled for publication later this year.

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